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Maths of Fundraising

6 Ways to Measure Your Fundraising to Understand Your Donors

I love data. Please don’t worry about me, I also like skiing, Star Wars, sneakers, dancing, and playing Lego with my daughter. I also really like people-watching. I can easily spend hours watching people and pondering why they are where they are, what they are thinking, why they are interacting the way they do. My Mum calls it nosey. I call it research.

My love of data is part of my nosiness. In fundraising, data represents people and the way they behave. And in some cases, it can help us understand not just the what they do but the why

Here are six critical things you should be watching carefully: 

1.Response Rate

The number of people who responded divided by the number you contacted.   

This will be a number under 1.0.

Example: If I mailed 1,000 people with my Spring Campaign and 245 respond with a donation my response rate is 245/1000 which is 0.245.

This can be expressed as 24.5%.

Number of responses / Number of people asked = Response rate.

There is no best practice response rate, whether we’re talking acquisition or donor cultivation, other than that cultivation response rate tends to be 5 to 10 times higher that acquisition rates. 

Take direct mail acquisition for example … if you have been doing this for many years your response rates will likely start declining as your exposure to available lists increases. If you are new to direct mail acquisition, mailing the same lists will likely get a higher response rate.

You should be able to find out the generally acceptable response rate by asking other fundraisers in your market though and use this as a benchmark. Most important is you compare your response rate to your recent past response rates to assess if things are on the up or down. 

2. Average Gift 

Income generated divided by the number of donations made. 

Example: If I raised $65,000 from 245 people their average gift is $65,000/245 = $265.31 

Average gift should be stable or growing, not declining. 

Compare like campaigns, such as Christmas last year compared to Christmas this year. If your average gift is decreasing over time, you may have an issue with your ask strategy and/or your targeting. If it’s staying the same, you likely have an opportunity to test upgrade ask strategies.  

New donors will pull your overall average gift down, so looking at average gift for new donors versus retained donors will ensure you aren’t making decisions for everyone that are influenced by a specific group, such as brand-new donors. 

3. Return on Investment (ROI) 

Revenue divided by expenses. 

Example: If it cost me $3,000 to mail my 1,000 targets then my ROI is the $65,000 / $3,000 = 21.6 — I brought in $21.60 for every dollar I spent. 

You should calculate ROI not only for a single project, but over time. Look at the return over 12 months, 3 years, even 5 years to get a better insight into the value and potential of that activity. Donor acquisition activity will rarely produce a positive result from the recruitment campaign alone, but will grow based on future giving. It’s also important for Monthly Giving programs, as the returns may be 12, 18, even 24+ months out from the initial recruitment.

BEWARE: ROI can be a blunt tool. Its two inputs are revenue and expenses. Reducing expenses can produce a better ROI, BUT reducing expenses in campaigns often leads to decreased revenue, leading to the same or even worse ROI. ROI does not tell you how much net income you generate for your cause. In fact, sometimes a low ROI will get you more income than a high ROI.  

Where I find the most ROI most important is when looking at acquisition campaigns. You can compare the ROI of different acquisition activity to help with your investment decisions and you can monitor a particular acquisition activity over time to assess if it remains viable. 

4. Second gift rate (usually measured within 12 months) 

Number of new donors who made a second gift, divide by the number of these donors who had made their first and only gift, within 12 months

Example: If I recruited 545 donors via my Christmas direct mail acquisition campaign in December and by the following December 263 of those donors had made at least one additional donation each then my second gift rate, over 12 months, would be 236/545 = 0.433 (43.3%). 

It is rare in most markets for second gift rates – except for monthly givers – to be more than 50%.

You might say that a donor who has given you only one gift isn’t quite a donor — yet. It’s kind of like that way a first date is not relationship. That happens over time. Or not. 

Second gift rate is usually measured over a set time frame, like 12 months. There are several factors that affect second gift rate. The main ones being the number of opportunities a new donor is presented with to give again, and how quickly they are asked again.  

(See this blog for more on how you can secure this critical second gift: The Most Important Gift from Your Donor – It’s the 2nd, Not the 1st!)

I recommend assessing second gift rates after 3 months, 6 months, 9 months, 12 months, 18 months, and 24 months, as each of these will give you insight into how effective your communications in each period have been at engaging your new donors to give again. In some cases, I have seen second gift rates double between 12 and 24 months. The cost to secure the second gift needs to be considered to understand where there is value in continuing to ask. 

5. Attrition rate 

Monthly giving attrition is a measure of the number of people who were giving last year but not this year.

Example: If I recruited 200 Monthly Givers in January and I have 120 still giving then I know that 80 stopped giving the next January, then my attrition rate is;

80/200 = 40%.

Attrition is a very good measure of success of a monthly program, but not that relevant for one off givers.

6. Income per donor 

Total income generated by a particular donor program divided by the number of donors who gave to that program. This gives you the average dollar amount generated per donor over 12 months. 

Example: If your appeals program generated $600,000 in total last year and 4,500 unique donors who gave one or more times, then your annual income per donor was $133.33.  

This measure tells me the relative value of your donors in your program and is even more helpful when benchmarked against the industry but it’s enough to start looking at your own levels over time. Income per donor should be increasing year over year. If it’s falling, there is a problem. If it is stagnant, you likely have some latent growth potential with your longer-term donors.

Acquisition usually drives down your overall income per donor (the average new donor gives less in a year than the average continuing donor), so it’s helpful to look at income per donor separately for new and continuing donors. 

Happy measuring. Please get in touch if you want to take a deeper dive into how to measure you campaigns, programs or donors. 

Related post: How to Use — or Misuse Donor Lifetime Value

We can help you explore your Donor Service needs and opportunities through our one-to-one Coaching. To find out more and book a free call visit: www.moceanic.com/coaching-plus/ 

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The Surprising Secrets of Hyper-Personalization in Fundraising

Sean and Jeff talk about hyper-personalization — using data to speak more specifically to donors.

The takeaway:  Not everything you can do to hyper-personalize is worth doing.

Here’s a way to think about it:

Most important form of personalization: Asking the donor for amounts that are based on her previous giving.

Another important form of personalization: The donor’s name.

Personalization that might be helpful: Mentioning the donor’s city name.

Other personalization that might be helpful: Mentioning dates in the relationship, such as date of most recent gift.

A lot more than this is possible.  But it can become very labor-intensive for uncertain results.

Find out what you can do to connect better with donors through the data you have!

And Sean Triner talks more about using hyperpersonalization at higher levels in his online course that takes you step-by-step through creating an effective Donor Survey (and using the data!). You can find out more in The Fundraisingology Lab.

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3 Ways to Find Out More About Your Donors

Sean Triner and Christiana Stergiou, Fundraisingologists at Moceanic, answer a question from Marta, who wants to know how to smartly find out more about her donors when there’s not much transactional information about them.

There are three ways:

  1. Just wait a few years and you’ll know everything you need to know. (Easy, but not recommended because it takes so long to get critical information!)
  2. Do a Donor Survey (get access to our course inside The Fundraisingology Lab) to find out what you need to know. (The best way.)
  3. Append the data from outside sources. (Fairly good, but expensive, and sometimes less trustworthy.)

Please share your thoughts by leaving a comment below. We’d love to learn from your experience.

CFRE Points:
Title of article (please use title caps and rename this file as Title V1 JB): The Data Does Wonders, But Only If You Use It
Bequests and LegaciesDirect MailDonor LoveMajor and Mid Value Donors

The Data Does Wonders, But Only If You Use It

When I tell people about our Supporter Connection Survey, one of the most common questions I’m asked is this:

What exactly do I do with the data we gather?

Let me give you a quick look at how to handle the bonanza of data you’ll get. But first, the most important advice I can give you:

Still go ahead with a Supporter Connection Survey even if you’re not sure what to do with the data! The gains that are in store for you are too important to put the project aside. It would be far better to do it imperfectly than to not do it!

That said, here’s a “real world” approach to what will be, for some, a data challenge….

The Supporter Connection Survey will give you several critical pieces of data:

  1. Legacy/bequest leads

Run — don’t walk — to give these to your major donor or planned giving people for a follow-up!

These are leads to hundreds of thousands (maybe millions) in future revenue. Every day that these leads sit untouched, their relevance and likelihood of yielding actual revenue fade. They can be dealt with on old fashioned paper if you can’t get them in the database. Just photocopy the surveys as they come in and give them to whoever deals with planned giving.

  1. Major donor leads

These leads are almost as important and just as urgent as the planned giving leads. So start following them up immediately.

Record key information on pen and paper if you need to – just get back to these people quickly!

Following up major donor and bequest leads doesn’t rely on a good data system. So they can always be managed in some way. Fortunately, they’re also the big money part.

However, there are a couple more pieces of data you’ll also gather…

  1. Donors’ specific connection with your cause

Let’s say your organisation is Save the Snails. You’ll ask donors a question about the part of your work they feel most connected to. Something like this:

What part of Save the Snails’ work is most important to you (choose one)?

  • Saving pigmy snails
  • Protecting polar snails
  • Rescuing homing snails
  • Standing up for basking snails
  • I care about all of the endangered snails

In a future fundraising message, you can use this information, like this:

Mrs. Example, I know you’ll be excited to help build our Snail World Super Habitat because, as you told me in a survey a few months ago, you love our work to protect polar snails.

This will boost those fundraising efforts.

To do this, you need to have a place in your data for this new field. This can’t be done until you have got your database able to do this. However, whilst it will increase revenue, it is not as significant as the high value leads.

You can keep the data in a separate database or list, just be really careful on quality control when you merge it for a direct mail or email.

When you’ve done the Supporter Connection Survey just once, most of your donors will have nothing in this field, so you’ll need default copy for the donors who haven’t taken the survey. As you repeat the survey through the years, it will become common in your data.

This will build better relationships and increase life time value – for you and your donor (they will value you more through their lifetime too!).

  1. Donors’ specific connection with your cause, verbatim

Donors may even write answers in their own words. Only a small proportion of supporters usually do this and don’t worry about recording it all straight away.

Just ensure you have a system for recording the small proportion who write things in their own words AND are planned giving or major donor supporters or leads.

To use this verbatim data, someone has to physically revise every single message. Which is ridiculous … except for your very best donors. For them, say the top 50 donors, this extra bit of human touch is very worthwhile. In the long term, you’ll need a field in your database to hold this. Just be careful not to use it wrong!

I hope this is helpful. More importantly, I hope it inspires you about the possibilities the Support Connection Survey opens up for your fundraising.

Sean Triner

Learn how to make your own Supporter Connection Survey by signing up for The Fundraisingology Lab.

In the course, I will take you through creating a survey, step-by-step in four information packed modules. And there are plenty of bonus materials and videos that will turn you into a true expert on Supporter Connection Surveys. This is a hands-on course and at the end of the course, you will have produced your own Supporter Connection Survey!

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FundraisingFundraising Training Needs

The Secret of Success: Do Only What Only You Can Do

Guest blogger – Dearne Cameron, CEO of Pareto Fundraising

(Sorry Moceanic subscribers and Dearne – the email that you may have received about this post did not explain that Dearne is the guest author of this article – not Sean!)

Fundraising leaders often ask me: ‘Is it better to outsource to an agency, or resource and build a highly skilled team in-house’?

Many years of charity experience have taught me this: It is not one or the other. It is a fluid working relationship that builds on a foundation of best practice, resources and returns.

It is important for a charity to have a highly skilled team that can align fundraising with the organisation’s strategy, while managing fundraising plans and engaging key stakeholders for fundraising purposes.

On the other hand, working with an agency like Pareto Fundraising provides a lot of values:

  • New ideas
  • Trend insights
  • The skills of a multifaceted team
  • Subject matter expertise
  • The benefits of scalability and resourcing

That’s all great, but isn’t an in-house staff cheaper?

Possibly not: outsourcing delivers lower operational costs and provides specialisation that is not always readily available in-house.  By using an agency, you have access to the range of skilled specialists who can deliver high-quality output, much faster than the thinly spread in-house resources.

Outsourcing is not a substitute for competent fundraising staff within an organisation. In-house teams still need to have the skills to work with an agency to get the best results.

An agency lets your organisation tap into a wealth of knowledge and talent and provides an opportunity to harness the experience of agency teams, who work across multiple clients, testing, analysing and adapting tactics to maximise results.

Think of it this way:

  • A lot of people — on your team and elsewhere — know how to create good fundraising strategy.
  • A lot of people — on your team and elsewhere — can write powerful fundraising copy and design great packages.
  • A lot of people — on your team and elsewhere — can manage complex projects.
  • A lot of people — on your team and elsewhere — can competently analyse data.

Those are things to outsource. Those people at an agency likely have more experience, more breadth, more specialisation.  After all, it is often all they do.

For example, an in-house direct mail manager may mail 10 direct mail packages a year, with various tests and variables, building on knowledge and experience.  But, for example, a typical Pareto Fundraising account manager could work on five times as many appeals, with five times the test and variable learnings.

Whilst you might have people who can do those things, only people on your team can effectively do these things:

  • Build relationships across your organisational silos to get relevant information from program people.
  • Make sure all internal stakeholders are getting the involvement they need (and not getting what they don’t need).
  • Manage upward to keep leaders just enough (but not too much) in the loop.
  • Stay on top of the many details that flow from any donor database.

There’s no way to outsource those things. The best agencies in the world can’t do it for you!

So only do in-house what only in-house people can do. Outsource the other stuff! It’s the most effective way!

The secret to working effectively with an agency is a collaborative partnership, developing a clear strategy, planning effectively and harnessing the knowledge both in-house and outsourced staff bring to the table.

Dearne Cameron, Pareto Fundraising

Note on Dearne from Sean: Dearne has worked with charities for 18 years. She was actually one of my first clients when I set up Pareto! She used to be General Manager and Director of Anglicare and Anglican Aid and Non-Executive Director for Make-A-Wish Australia for six years. She is on the board of House-With-No-Steps so has lots of experience either side of out-sourcing.

Please share your experience with outsourcing or not by leaving your reply below. We’d love to learn from your experience.

You can help your in-house people reach their maximum potential with our powerful Moceanic courses on practical fundraising topics. Find out more here.

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Direct MailDonor LoveMaths of Fundraising

How To Ask Every Donor The Right Amount

Or: How to Avoid Looking Like You Don’t Know Your Donors

In this blog, I refer to the gift ask chart. You can get your own gift ask chart to download as an excel file. Just click here.

What’s worse than asking a $25 donor for $1,000?

Probably asking a $1,000 donor for $25.

Either one basically tells the donor — in flickering red neon 10-foot-tall letters:


And really, it’s almost as bad if you’re off less dramatically, like asking a $50 donor for $250. The message is still We don’t know you.

So how do you ask the right amount of each donor?

When I first started in fundraising, I worked at a shop where we’d create three versions of every appeal:

  • A Donors: Those whose last gift was more than $500.
  • B Donors: Those whose last gift was between $100 and $500.
  • C Donors: Those whose last gift was under $100.

In theory, the three versions had related but different offers. A Donors might be asked to feed everyone in the project for a month, B Donors for a week, and C Donors for a meal at a time.

You could then write to the giving scale of each donor group.  It was cumbersome. And the bands were, I thought at the time, awkwardly wide. And writing three almost-but-not-quite-the-same letters was surprisingly taxing.

There’s a better way — in fact, a couple of better ways — to ask every donor the right amount.

Here’s one. The Gift Ask Chart:

askchart V2

This simple Excel spreadsheet is based on an offer in which $20 will “help” one child. (Please excuse the vagueness of this offer; it’s just an example! You can get your own gift ask chart here.)

The first column groups the donors by the amount of their last gift to the organization.  Sometimes the amount is their largest gift, their largest give in the last 12 months, or some other way of segmenting them.

The first row with amounts is for faulty records in the data. After that, it’s simple amount ranges. It’s worth noting that typically in each range, the donors are clustered at the low amount.

For a donor whose last gift was at least $50, but under $100, this chart would yield an ask array like this:

$40 to help 2 children

$80 to help 4 children

$100 to help 5 children

You can also work it into the copy, so that same donor might find a paragraph like this in her letter:

Would you be willing to help 2 children today for a gift of $40? Or maybe you can help 4 children by donating $80. And if you really want to make a difference, your gift of $100 will help 5 children.

One advantage to the gift ask chart is you can see all the possible ask for donors at every level.  You can give it the “smell test” — do the amounts feel right?

(Note that in the spreadsheet, there are no specific ask amounts for donors above $1,000. It’s pretty common to have open asks only for donors above a certain level, suggested amounts are as likely to downgrade what they will give as it is to guide them.)

This spreadsheet is available for download  here.  You can then modify it for your currency, your donor levels, offer, etc.

There’s another way to get almost the same thing: Use Calculations.  This is how that looks:

$[donor’s last gift, rounded to nearest $20] to help [ask amount/20] children

$[donor’s last gift * 1.5, rounded to nearest $20] to help [ask amount/20] children

$[donor’s last gift * 2, rounded to nearest $20] to help [ask amount/20] children

The downside of this method is you can’t see the actual numbers it will produce. Use this method only if you have super-smart data people who can make sure it won’t produce nonsense, like three all-the-same ask amounts.

It’s great to ask donors appropriate amounts, and these are two ways to do that.  But it isn’t magic!  You still have to have a compelling offer — something they’re thrilled to do with their donations.

You can get your own gift ask chart to download as an excel file. Just click here.

Please share your experience with asking donors the right amounts by leaving a reply below. We’d love to learn from your experience. And you can post any questions you have about the gift ask chart here too.

CFRE Points:
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TrendsMonthly Giving

What is Essential Data to Capture and Why?

It’s called “rage giving” — impulsive donations to organisations seen as resisting the agenda of US President Trump.

It has resulted in an astounding outpouring of philanthropy for some organisations:

The American Civil Liberties Union has raised more than $80 million. Planned Parenthood has gained more than 600,000 new donors. Many other organizations — environmental, poverty, educational, and more — have received influxes of rage donations.

A friend in New York asked me a simple question: What information do we need to capture to be able to build the best relationship with a “rage donor”?

In my experience, the key information (here in order of importance, but not in order of how you gather it) is this:

  1. Full name.
  2. Their transactional information with you. That is, what did they do? Take part in x event, sign y petition, volunteer, collect or donate.
  3. Phone number. Using the phone is usually the second most effective way of converting single donors, petition signers, event goers, and others to monthly giving or larger gifts.
  4. Postal address. About 50% of the value of gifts comes from just 5% of donors. If someone gives higher than average then address (and therefore location) is very important.
  5. Age. After the actual amount someone has given, this is the best indicator of the capacity to give. It also allows you to predict lifetime value, including monthly giving retention, much better.
  6. Email. Of all digital channels, most one-off donors or people who sign petitions or surveys and then choose to become monthly givers will come from email. It is also the channel most likely to generate second gifts from one-off donors.
  7. Facebook. This social channel accounts for more than 80% of leads generated by proactive campaigns, and two-thirds of donations. Non-Facebook social accounts for less than 10%, with search and display ads less than 10% too.

That’s the basics.

I also believe we should build relationships with donors, so going beyond these basics will be very useful in the future. To gather more data — your supporter preferences, etc, we need to use the Supporter Connection Survey. Get instant access when you join The Fundraisingology Lab.

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